Iraqi Kurds see sharp decline in oil exports

Baghdad, September 10, 2011

Crude exports from Iraq's northern Kurdish region have dropped to 50,000-60,000 barrels per day from 160,000 bpd since late last month, several Iraqi government sources said on Saturday.

The reason for the decline was unknown, they said.

'The oil ministry was informed at the start of this month by the North Oil Company that crude quantities pumped from the Kurdish region were cut to 50,000-60,000 bpd from 160,000 bpd at the end of August,' an oil ministry source said.

A North Oil Company source said that Kurdish exports had declined by 'more than half' from 160,000 bpd around the end of August.

'We haven't the least idea about the reasons for the decline and we informed the oil ministry of this issue more than a week ago,' said the source, who asked not to be named.

A source in the office of Iraqi Deputy Prime Minister Hussain al-Shahristani also confirmed the sharp decline and said: 'We hope it is a technical fault.'

Iraq's semi-autonomous Kurdish region and the central government in Baghdad have long-standing disputes over control of the northern oilfields.

Iraqi Kurdistan halted exports in 2009 due to disagreements with Baghdad over contracts the Kurdistan Regional Government (KRG) signed with foreign oil firms to develop its fields. Baghdad considers the contracts illegal.

In August, Iraq exported a total of 2.189 million bpd of crude in August, including 461,000 bpd from northern fields, according to figures from the State Oil Marketing Organisation, up from 2.164 million bpd in July.

Most of Iraq's exports are shipped from the southern oil hub of Basra. Much of the oil from the northern fields flows by pipeline to the Turkish port of Ceyhan.

The ongoing dispute between the central government and the KRG shows no sign of abating.

On Sept 5, the Iraqi Oil Ministry said it was barring US oil firm Hess Corp from its 4th energy auction in January because the company signed deals with the KRG.

Later the same day, the KRG issued a sharply worded statement criticising a new draft hydrocarbons law making its way through Iraq's parliament, saying it violated 'the essence of the constitution.'

The KRG said the Iraqi parliament should reject the new law, long awaited by foreign firms seeking more solid legal footing for investments in Iraq.-Reuters